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Eskom may appeal order to restart R16bn boiler maintenance tender – court


An Eskom coal-fired power station

An Eskom coal-fired power station

Eskom has won the right to appeal an October court judgment that ordered it to rerun the tender to maintain its boilers at its coal-fired power stations. 

The tender – worth R16 billion – is one of Eskom’s largest tenders and took more than a year to award. The successful bidders were Steinmuller Africa and Actom. A third bidder, Babcock Engineering, was disqualified on the grounds that it failed to submit a welding certificate listed in the tender documentation. 

The three are each original equipment manufacturers (OEMs) of Eskom boilers at particular power stations. The three companies had previously shared the tender between them. OEMs that built the plant and have a history of maintaining it are best placed to perform maintenance. Contracting OEMs directly rather than third parties is one of the key actions in the energy recovery plan tabled by the Presidency. 

Following its disqualification, Babcock went to court and argued that Eskom already had the welding certificate in question and that it should not have been disqualified. It also claimed that the tender documentation was unclear. The North Gauteng High Court in Pretoria overturned the tender award and gave Eskom eight months to rerun the process. 

READ | Tender for Eskom’s coal-fired boilers back in spotlight

On Monday, Eskom won the right to appeal the judgment. Eskom CEO André de Ruyter said that the company understood the value of OEMs carrying out maintenance, and Eskom was obliged to appeal the judgment.

“This is one of those cases where Eskom was damned if we do and damned if don’t,” said De Ruyter.

He said because public procurement legislation and processes demanded a higher level of probity than in the private sector, Eskom was obliged to disqualify Babcock and then to defend its decisions as Babcock’s tender application was, strictly speaking, not compliant. The court ruling compounded Eskom’s difficulties as it would have been impossible for Eskom to redo the process in the time set by the court.

“The public procurement space is so fraught with scrutiny that you have to be absolutely scrupulous,” he said. 

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